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Property firms want Pag-Ibig to relax loan rules

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Published : Saturday, September 10, 2011 00:00
Written by : Krista Angela M. Montealegre Reporter

AN organization of the country’s biggest property developers want state-run Home Development Mutual Fund to relax loan rules, which have hampered the broader low-cost and socialized housing market.

In a briefing, Manuel Crisostomo, SHDA national president, said the new rules have brought down monthly Pag-IBIG Fund take outs by 37 percent to P2.4 billion this year from the average monthly loan take outs of P4 billion in 2009.

“The new procedures made it more and more difficult for buyers to avail of loans, get their loans approved and move in to their homes,” said Crisostomo.

Amid homebuyers’ difficulty in obtaining loans, SHDA—which counts Ayala Land Inc., Robinsons Land Corp. and SM Development Corp. as members—may defer the roll out of new projects until these concerns are addressed.

Pag-IBIG Fund now requires a loan applicant to present an income tax return as an additional requirement on top of the employment certification required in the past.

The fund also requires that 40 percent of the net disposable income of a loan applicant can cover monthly amortization. This should be changed to around 50 percent to 60 percent of formal income from the current net disposable income, Crisostomo said.

SHDA members also pay back Pag-IBIG Fund the defaulted loan obtained by their clients, which should be enough guarantee for the fund, he added.

The organization is holding talks with government housing agencies to identify strategic measures to boost the sector’s performance.

“This is a major challenge for us in the industry, which is catering to the low-income market, where Pag-IBIG plays a most major role in providing buyers financing,” said Crisostomo.

In the mass housing sector, Pag-IBIG accounts for bulk or 65 percent of the financing, while the balance is spread among the banking and financial institutions, which cater to the higher income groups.

Average Pag-IBIG loan size in the low-cost market range from P750,000 to below P1 million and about P400,000 for the socialized housing projects.

Crisostomo said the “innocent” developers are paying the price for the “isolated” fiasco caused by Globe Asiatique Realty Holdings Corp., which allegedly had “ghost borrowers” who were granted Pag-IBIG Fund loans.

Another blow to the housing sector is the Land Registration Authority computerization project, which was meant to streamline business processes and link registers of deeds nationwide.

The long transition process has extended transaction processes from several days to more than three months, Crisostomo said.

“Instead of being able to move in to their new homes immediately, these individuals have to pay their rent for their current homes, instead of paying the amortization for their own homes,” he added.

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